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Find which truck should purchase

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Joe and Tonya Rodeo are going to buy a new truck for their ranch. Relevant information about the two trucks is as follows:

                                   Truck A                       Truck B

Original Cost                      23000                     19000

Projected Economic Life     4year                      3year

Annual Cash Outflows           4000                       3800

Salvage Value                         3500                      3000

Question 1: If the after-tax discount rate is 5%, which truck should they purchase?

Reference no: EM132496174

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Find which truck should purchase : If the after-tax discount rate is 5%, which truck should they purchase? Joe and Tonya Rodeo are going to buy a new truck for their ranch.
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